CAPEX

Client’s challenge

The downstream arm of a prominent national oil company in the GCC was executing two mega projects on an accelerated schedule and looking to do an objective assessment over the practicality of proceeding with these plans. Given heightened project activity across the region, there had been concerns that commodities, resources and manpower would be in sudden short supply, thus threatening to derail progress that the project owner had achieved. Our client was struggling to plan and adopt a realistic yet ambitious execution strategy that would promote timely completion and no cost overruns.

It was apparent that lack of effective internal control mechanisms and no best practices to benchmark against success stories in the region was also causing some internal confusion. There remained a visible need to emphasize key strategic objectives that would serve as a long-term execution roadmap for the client.

Our solution

The board of the national oil company engaged Contax Partners to serve in an independent advisoryrole and assist the company to effectively plan execution of its mega-projects. We assembled a team that included subject matter experts and industry professionals to assist the core execution team in an on-going support role. The consulting teamwas continually mobilized on-site and worked with stake-holders and experts to understand the different constraints and problems faced by the project owner.

To initiate work on our mandate, we first measured the likelihood of the project’s success using key metrics and parameters that were developed in-house within the Business Advisory unit. Our team leaders observed and evaluated the practicality of the client’s ambitions by engaging at different levels within the organization and also with external resources that would likely play a part during execution. This stage, the survey phase, was a vital component to understand the client’s reality and would be used as an objective parameter to understand overall readiness for execution. We next assessed the GCC project landscape and also provided illustrations of key energy and non-energy mega-projects that would cause a resource bottleneck when the region would see peak workload activity. This macro level assessment allowed the client to view how neighbouring countries would be forced to compete for the same resources over time.

Diving deeper, the consulting team gauged the capabilities and capacity of contractors, sub-contractors and vendors that were prequalified for the project; our mode of review was based on gathering feedback and conducting a rigorous assessment of on-going activities. This then extended into an analysis of availability of heavy equipment, construction vehicles and materials (cement, rebar, asphalt etc.), as well as projected regional demand for key long lead items. Our team also focused on assessing the local and regional labour markets to understand how man-power requirements would be met in the event of a shortfall or if ramped up project activity would require more workers.

Lastly, from our constant engagement with the client, we identified best practices that suited their hierarchy and developed sustainable models of excellence in project delivery. This was aided by regional benchmarks that remained relevant to the client.

Impact on client’s business

Following our presentation, the executive committee of the board realized that execution of two mega-projects in parallel was unsustainable and entirely unrealistic given the country’s limited resources. Based on our recommendations, the client adopted a staggered approach for construction by separating EPC award of the refineries over 12-15 months. Since then, the project owner has been successful in adopting strong internal control mechanisms, such as dedicated project management teams, silos to distribute workload effectively across contractors and a clear roadmap by which the project owner is on the path to successful project execution.

LET US HELP YOU SUCCEED IN THE ENERGY MARKET!

Contax Partners assists project owners, contractors and suppliers to maximize opportunities associated with these projects, guide them on the underlying risks related to execution and the effects of increasing project workload.

Paul Raw – Owner

Critical Risk Associates

Contax Partners business advisory consulting services have consistently identified new and developing opportunities for our core businesses across the region. As a result of advisory services we have been able to position ourselves strategically for future opportunities and in turn maximize our own development potential. Their market analysis and intelligence is consistently current in relation to what the market is doing and always reflects our specified goals. Contax Partners have conducted new market opportunity analysis on our behalf, identified key opportunities and then assisted us in the development of comprehensive solutions for those target opportunities.

Tony Mitchell - General Manager

Aman Water and Air Manager Technologies Middle East

As General Manager of Aman Water and Air Manager Technologies Middle East (divisions of Bahrain Energy Services) I have been working closely with Contax Partners since 2011 and have found them to be discrete, trustworthy, efficient and entirely professional in all dealings. Contax Partners have an excellent broad sector and market knowledge and an enormous network of industry contacts, particularly at senior levels, in sectors such as Oil & Gas (the wider energy sector), Petrochemical, Water & Electricity, Construction, and Healthcare, which are the focus sectors for our Clo2ix and Air Manager products and services.

JEREMY NOTHINGHAM – PARTNER

COALTECH

I have had the privilege to be associated with, and to work alongside the Contax Partners team for the past 4 years, and have always enjoyed doing business with the various members of their multi-talented team. Whether undertaking a study, developing ideas for a new investment, or developing a plan for the investment, or implementing that plan, the team works together seamlessly to make things happen in the best interests of their clients, they come highly recommended.

PAUL SCHOENFELD - MANAGER OF MARKET INTELLIGENCE & SPECIAL PROJECTS

SHELL EXPLORATION & PRODUCTION CO.

We used Contax Partners as a way to gain access to experts in a specific market where they have individuals with ‘boots on the ground’. I found Contax Partners to be particularly accommodating to the timeline required, and was impressed with their clear expectation setting from the onset. Furthermore, I found the support and interface to be top notch. We would absolutely recommend Contax Partners for consulting support where a company does not have the required knowledge. This is the space in which there is clear value add from procuring Contax Partners’ services.

Shukri A. Aziz Al-Mahrous – Deputy CEO

KNPC

Contax Partners is a highly professional organisation, which supported KNPC to implement its mega project strategy, and helped our company to make good decisions, particularly in relation to the Clean Fuels Project. Contax has excellent insights about the regional projects market landscape and Contractor landscape, and has definitely added value to us over the years.